US Telecom Providers' Declining Capex Will Continue: Report
Telecom capital expenditure is declining as carriers look to cut network costs, ResearchAndMarkets.com said Thursday. U.S. telecom providers had $80.5 billion in capex last year and $505.2 billion in revenue, the report said. That represents a capex-to-revenue ratio, or capital intensity, of 15.9%. Capital intensity “was in the 17-18% range in 2022-23,” the report said. “That was well above historic levels. The ratio started to moderate in 2024.”
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Based on Q1 earnings calls and other data, the decline will continue. “US telcos are looking to monetize recent investments, and more focused on conserving capital and cutting costs," the researcher said. "Economic and policy uncertainty continues to be high, with inflation and recession fears stemming from the presidentially contrived trade emergency.”
Telecom providers are also using AI more to cut costs, the report noted. AT&T employs it “to improve call center automation, software development, and digital acquisition. The company says that investment in automation is helping offset labor costs and drive self-service efficiency across sales and support channels.” Verizon is “integrating AI into customer care and network [operations]; use cases include predictive maintenance, customer service automation, and internal process efficiencies.”